Do any public transportation systems make a profit?

We’re working on writing policy with the boyfriend’s mayoral campaign, and somebody asked me last night if public transit EVER makes a profit. I read an article some time back that essentially said no, it doesn’t. I want to say there were one or two exceptions (Tokyo?) but I couldn’t remember if the article was limited to light rail or if it included things like bus systems. A search or two came up with nothing, so I figured I’d ask you guys.

While you’re at it, recent examples of cities that have turned crappy bus systems into effective ones are very welcome.

The New York MTA depends upon appropriations and grants from other government sources to break even.

The Chicago Transit Authority is the same:

And the Atlanta system as well:

You would need to do a comprehensive review of significant municipalities, transit systems to be able to make such a claim.

No cite, but from what I understand, the Hong Kong transit system (MTR and buses) is one of the only systems in the world where all expenses are covered through farebox revenue.

Okay, found a cite: Farebox recovery ratio - Wikipedia

Boulder, Colorado: instead of having large buses at distant intervals (30 minutes to one hour), several of their routes are now served by smaller buses at frequent intervals (10 minutes). The increase in passenger traffic more than paid for the increased costs from new equipment and personnel.

I also remember reading that the Hong Kong transit system was the only system in the world that was able to recoup its construction costs, and that was by selling the air rights over its stations.

That’s a really useful example - too bad their webpage isn’t all that great, so it’s hard for a non-native to figure out what’s a HOP as opposed to a SKIP. :slight_smile: It sounds like a great system.

This runs contrary to common practice in the transit industry and I am not aware of any public transit in the US with 100% farebox recovery. A new transit bus can easily run a million dollars, insurance is not free and fixed operating costs will run from $40 to $200 per hour for revenue service. Do you have a cite?

The discussion of farebox coverage isn’t all that fair. Advertising revenues should also be considered as they are generated by the transit systems as well. Grants and appropriations from other entities should be excluded.

See, the current problem: nobody rides the bus because the bus sucks. The bus sucks because nobody rides the bus. There are no schedules at stops, very few bus shelters or even benches, and signage is terrible. The bus only comes once an hour and it doesn’t go where you’d need to be going. It is simply impossible to walk up to a bus stop and figure out how to get somewhere, something you can do in pretty much city I have ever been as a tourist. They keep cutting services because the bus is expensive and doesn’t pay for itself, and then you get into this vicious circle.

We’re looking to a) prove that it just isn’t going to make any damned money but that we need it, and b) find some good examples of how we could improve the system so it might need less funding but be more effective.

A very indirect but valid cost savings to effective public transportation is the savings to streets/highways.

Of course they are very expensive to maintain but no one ever ponders if they make a profit. This is no doubt because most people find them more useful than subways and buses.

However, there is a real savings to road maintenance if x number of people use the roads less. Also, there a savings in capital improvements. As an example, if x number of people are not using the streets/roads, then quite possibly you don’t need to add an extra lane to that road where otherwise you might have to.

HEAVY loads are what do virtually all the wear and tear on pavement. Stuff like cement trucks, semi’s, heavy passenger busses and so on. Passenger cars do virtually none of the wear.

Yes, its true if there were many less cars, you could have less or more narrow roads but that isnt going make the roads last longer. As a matter of fact, if everyone was riding heavy busses, it might even make things worse.

North of us, the Clemson area has free buses. Like, totally free - nobody pays at all. The buses go to all the colleges and universities in the area as well as Clemson, Seneca, Central, I forget where else. Totally free. They save the money they’d be spending on fee collection devices and such, the colleges put in the money they were spending on their shuttle services, and there are tons of riders. It’s evidently the largest free system in the country in terms of riders.

Of course, a cow college town is very different from the state capital, but it’s amazing that it works.

I would also cite the many benefits of increased transit use such as reduced pollution (health improvement, quality of life, less wear on buildings, etc), higher property values (transit corridors show higher property values and reduced road congestion raises property values along busy traffic routes), greater public health (people who take transit do more walking than drivers), shorter commute times (more transit means fewer cars) and other benefits of transit that aren’t captured in the fare box.

There’s also a famous case in Mexico where they instituted a bus system similar to light rail transit that had great success. Let me look…
Hmmm, Mexico City just won an award for it’s bus system, but that’s not the one I had in mind. Well, whatever. Mass transit is awesome.

I don’t know about other countries, but in the USA you can look back to the heyday of railroad and public transit, form the 1880s - 1920, when interurbans and such were springing up all over.

None of these were publicly funded, and they all went bust or had to combine operations and cut back. Even back when there weren’t cars (well not much anyway), public transit, such as it was (trams, horse drawn or otherwise, subways, Els, etc) never were able to make a go of it. And they had the advantage of high density cities with no cars.

The problem is public transit has to provide for EVERYONE not just make a profit. And the two things counteract. For instace, a baby and a carriage take up 3 spaces on a bus. One for the mother and two for the baby and carriage. But the mother only pays. This leads to over crowding of busses and people don’t like that. I’ve seen mothers get on with five kids and only the mother pays. (It’s not supposed to work that way in Chicago, but it always does).

Seniors take up just as much space but get discounted rates.

Now I’m not picking on mothers and seniors but it shows that you have subsidies. This is never good to achiving profit. Bus lines must also run to city rules, which mean they often run empty. I take busses in the afternoon and they are woefully empty. Maybe two or three people on the Milwaukee or Fullerton Bus in Chicago. This is a waste. But it has to be.

You could run a profitable system but it would have to be very limited in scope, say rush hours only. It would have to charge the same price for everyone and it would have to have a distance rate. The longer you ride the more you pay.

Again, I’m not saying this SHOULD be. I am for giving seniors discounts and helping mothers but that means less profit.

Well that is really a bit of a stretch. You’re right of course that heavy loads cause the most damage. A typical 5 axle truck is legal to carry around 80,000 lbs - and typically carries quite close to that. I’ve seen overloaded 10 axles with around 140,000 lbs. Those are what cause the damage.

A bus varies from about 10,000 to 25,000 lbs - so it is a big stretch so say they are a making things worse. Like cars they are not in the realm of the big trucks which do the real damage.

But what you are really discounting (and I should have been more explicit) is the affect extra cars on the road have on congestion - which in turn causes those big 80,000+ lb trucks to slow down, speed up, stop, start. This, more than anything else, causes the wear and tear on the roads. And hence increased public transportation leads to less congestion leads to less road maintenance.

This is pretty much the opposite of true. The vast majority of all public transit from 1880-1920 was publicly funded.

Transit systems were started by private interests in earlier eras. (They were called the Traction Barons, for those who see that term and are puzzled by it.) By late in the 19th century, though, the trend toward publicly-owned systems was overwhelming. The capital needed to install public transit was too large for private concerns. It had to be handled by bond issues. And of course the party bosses could make significant graft.

None of the public transit systems made money, but they weren’t supposed to. And fares were controlled even when increases were utterly desperately needed. Politicians catered to public demand for the nickel fare.

Check out Robert Fogelson’s monumental Downtown: Its Rise and Fall, 1880-1950, dry but one of the great books on history.

There were hundreds of cities with systems, usually many systems each, so generalizations are difficult. And interurbans tended to be private because they cut through many jurisdictions. But overall, public transit meant publicly-funded transit in every city after the initial attempts by private interests.

Transportation hardly ever makes money directly, but the economic benefits of trade, jobs, etc. and the social benefits of people being able to get around have led to nearly every government in history subsidizing transportation systems.

Back as far as the Roman Empire – all those roads that led to Rome were built & maintained by the government. Generally, local governors were responsible for them, and often used chain gangs of prisoners or slaves to do the work.

P.S. You ask if “public transit EVER makes a profit”. That’s a false question. Do the interstate highways in your city make a profit? Does the airport? Of course not. No transportation system does.

I dunno, have you seen how expensive it is to fly out of the Columbia airport? It probably makes a profit.

Unlike most roads and waterways and sidewalks, people are generally expected to pay a fare to support public transportation in the form of light rail, buses, streetcars, omnibuses drawn by horses, etc. Should they be? Frankly, I really don’t think so, when I think about it, considering the benefits to the city as a whole - but you’ve got a whole lot of conservative people screaming about paying for the bus system or bike lanes who have no problems fixing bridges or putting up streetlights. For some reason, that’s just the way it is.

I used to run a small bus system but I cannot find any summaries of profit/loss statement comparisons right now. In the US many bus/transit systems were started as profitable private enterprises but with the advent of the postwar motor car, the systems lost rider$.

The first city I was with bought out the local electric power company-owned bus system using federal and local funds (90/10) to buy a new fleet of buses (at $50k each). In the second city system I was with, we replaced the previous clunkers (that had been bought from a private company) with another federal/state grant (at 4125K each).

This site has some stats but not on finances. There may be a few profitable systems but as a rule the ones in the USA, and surely elsewhere, are heavily subsidized by governments.

Here’s some historical info on early systems in NC.

Singapore’s (of bus and rail) system makes an operating profit.

I am not sure though if the cost of the land and construction or how it is amortised